Irwin Mitchell sees growth slow as profits inch downwards in second year since Thomas Eggar tie-up
National firm posts 2.8% uptick in revenue as profit growth proves elusive
September 04, 2018 at 06:48 AM
3 minute read
Irwin Mitchell has posted a 2.8% uptick in revenue to £241.8m for 2017-18 – a slowdown on the 6% rise posted by the firm last year.
The results come after the firm's second full financial year since its merger with regional outfit Thomas Eggar in December 2015, since which it has struggled to meet earlier expectations that the combined firm would have total revenues of about £250m.
Meanwhile, profits have fallen slightly – from £12.3m to £12.1m – which the firm attributed to "a number of one-off costs that will position the business more strongly for the future". This year's figure represents a 28% slump since 2014-15, when the firm posted pre-tax profits of £16.7m.
The firm declined to provide a profit per equity partner (PEP) figure, but last year Legal Week estimated that it had remained static at £452,000.
The firm operates under a corporate structure, after Irwin Mitchell Holdings was set up as the parent company of its limited liability partnership (LLP) in 2011. The firm's position is that as its LLP members are remunerated according to salaries and bonuses rather than profit shares, a PEP figure would not be an accurate reflection of how it operates.
Irwin Mitchell has struggled to regain its footing since profits fell by 25.7% following the 2015 merger. Earlier this year, six partners from the firm's Manchester real estate team defected to Addleshaw Goddard – the second of two significant hits the real estate team has suffered in two years, after five partners resigned in 2016.
However, the firm has made some significant investments during the past year, after announcing a sector-focused strategy for its business legal services division last July. The six sectors the division now focuses on are: manufacturing, technology, financial services, real estate, education and consumer services (comprising retail, hotels, sport and leisure).
The firm promoted 124 people during its latest partner and associate rounds, including a nearly all-female promotions round in May, with six women joining the partnership out of seven.
It has also continued to invest in its operations and technology, and acquired new premises in central Manchester. Last year, the firm paid out thousands of pounds to shareholders in its first dividend since February 2016, and the firm has also continued to build out its private wealth division, which was launched 18 months ago.
Group chief executive Andrew Tucker said: "Our trading performance in the past year was very strong and we're increasingly seeing all parts of our business working together to deliver the services our clients truly value, whether that is related to business or their personal lives. More and more of our clients are using multiple services with us as they recognise that it makes sense to simplify their range of advisers."
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